Indian technology firms: Seeking to avoid a mid-life crisis | The Economist

Western firms such as IBM and Accenture can be sniffy about their Indian rivals’ sophistication. Yet customers seem to be getting more promiscuous about whom they buy their “solutions” from: witness the rise of salesforce.com, a web-based, off-the-shelf product that helps companies manage their sales staff. This suggests that barriers to entry have fallen. The three Indian firms certainly hope so, and are throwing resources at muscling into higher-value services. If they get the formula right, their sales from this line of business “could go up fast”, says Mr Kaka.

To make the leap into the top league of global IT services, India’s three giants may have to hire many more people in rich countries. That is partly because the required skills are scarce in India, and partly because a physical presence is needed for some tasks, especially in consulting. Japan’s carmakers were pilloried in America until they shifted some production there, hiring locals and thus creating local loyalty. India’s IT firms are now following their footsteps.